Game spending goes gaga

$17.9 bil megahaul takes sector to another level in '07

While DVD sales might have slipped in 2007, another key segment of the home entertainment market had a banner year: video games.

Sales of video game hardware and software came in at an estimated $17.9 billion, according to data from market research firm NPD Group released Wednesday. That's up 43% from 2006, with credit largely going to high consumer demand for Nintendo's DS portable gaming device and Wii console.

Hardware sales came in at $7 billion, up 54% from 2006, NPD said. Within that, sales of consoles soared 73% to $5.1 billion. Nintendo's Wii led the charge with nearly 6.3 million units sold -- a number that could have been much greater, analysts said, had production problems not led to widespread shortages of the console, particularly during the holidays.

Consumers also bought 4.6 million Xbox 360s from Microsoft and 2.6 million PlayStation 3s and 4 million PlayStation 2s from Sony. The PS2 continues to be the most popular gaming system in the country, with an installed base of 41.1 million. U.S. consumers also own 9.2 million Xbox 360s, 7.4 million Wiis and 3.3 million PS3s.

Portable game device sales rose 19% in 2007 to $1.9 billion, led by Nintendo's DS, which sold 8.5 million units. Sony moved another 3.8 million units of its PSP. U.S. households now own 17.7 million Nintendo DS devices and 10.5 PSPs, according to NPD.

On the software front, consumer spending for console and portable games came in at $8.64 billion, a 34% increase from 2006. The category was driven by console games, which brought in $6.64 billion, 39% more than the previous year.